Mark Reichman: Well, that’s very helpful.
Joe Craft: I think that when we look at it, to try to give you some idea, so I think we’ve got invested around $67 million in Infinitum. And we believe that cash flow that we’ll receive just from these two announcements are going to give us an attractive double-digit return just on net investment as a byproduct of that relationship. And [that doesn’t even] (ph) anticipate what we would get on that actual investment in Infinitum. So that sort of gives you an idea of the scale of the opportunity just from this one or these two products that we are talking or are ready to design, build, and sell into the marketplace.
Mark Reichman: Well, that’s really helpful and I appreciate that. I really didn’t have too many questions on the guidance. I thought that was pretty straightforward and looked pretty good. So thank you very much.
Cary. P Marshall: Thank you, Mark.
Operator: Our next question is from the line of David Marsh with Singular Research. Please proceed with your questions.
David Marsh: Hi, guys. Thank you for taking the questions. Appreciate it and congrats on a really great year. Just as we start to look forward into ‘24, I guess, as some of my questions kind of echo a little bit some of the questions previously. I mean, particularly in Appalachia, it looks like you guys had some margin compression. Was that in part or largely due to your production shortfall there and your need to purchase other externally produced coal?
Cary. P Marshall: Yeah, I mean, that’s right, Dave. I mean, there was margining compression in Appalachia, primarily driven by the items that we talked about with the production issues, particularly in the back half of the year that we experienced within the region.
Joe Craft: So essentially, we had — longwall at Mettiki didn’t operate the second half of the year. So that now is operating. So you’re going to see us go — that volume to come back into the market. At MC we went from four units to three units starting, I believe, in September or October. So we’re planning to operate at three units at MC. We do have some new equipment there. So we think that our cost should be rather relatively stable. ‘24 there, but….
Cary. P Marshall: And then, David, as you look into 2024 in terms of the compression that you see on the margins on that side of it, that’s primarily on the top line driven as we had some higher price contracts that were — that we shipped on in 2023 that expired. And the market environment’s a little bit lower as we look at where we’re contracted in 2024 related to the Appalachia region.
David Marsh: Right, understood. So just pulling that thread forward on the Appalachian EBITDA expense per ton, we should naturally expect that to decline from the fourth quarter level, correct? And then what would the trajectory be of that? I mean, do you think you can get back down into the 40s or is that — are we living in a 50s kind of world in terms of expense per ton there?
Joe Craft: I’d say you’re looking at the 50s, not the 40s. The industry has experienced inflation like all others. But — so all of our costs have gone up somewhat just because of inflation. But then you factor in going from four units to three. Another factor in Appalachia in 2024 is we’re in the process of moving to the new reserves we bought at Tunnel Ridge. And so we do have shorter panels in 2024 compared to historic as well as projected in ‘25 forward. So we’re probably going to have some reduction in volume at Tunnel Ridge that enters into that mix. But, yeah, you’re looking at probably mid-50s in Appalachia for the year would be the estimate right now, which is what we’ve sort of guided to, the $54.25 to $57.25.
David Marsh: Right. Yeah. And I mean are we going to — I’m just trying to get an understanding of trajectory on it. Will it start still kind of closer to the Q4 level and gradually decline throughout the year or is it going to just — is there going to be a pop down and then a flat kind of throughout the year?
Joe Craft: Right now, our quarter — our first quarter appears to, it looks like it’ll be in the low end of the range, if not lower than the range. So if we can get the volume out of Mettiki that we’re anticipating, the first quarter should be a good quarter. Then when you look at the trajectory beyond 2024 into 2025, we should start seeing the benefits of us getting into the new reserves at Tunnel Ridge. So we should see some decline in the 2025 time period, depending on the inflation of course, inflation could take some of that away from us.
David Marsh: Yeah, sure. Absolutely, absolutely. Well, that’s excellent. That’s very, very helpful. And then just lastly from me, in terms of — as you look at your cash flow and your opportunity set with that cash flow, could you just kind of rank it in terms of priorities, expansion CapEx into like the new lines of business that you’ve been pursuing versus debt reduction and potential increase to the distribution?
